This article does not constitute of any political stand or opinion, it is a purely an analysis of the most relevant players from a strategic point of view. 

There is a lot of buzz about the Taiwan Strait recently: incursions of Chinese jets close to Taiwan airspace, trade of words between Chinese president Xi Jinping and Taiwanese leader Tsai Ing-wen, etc.

The stake is high: even a slight disruption of Taiwan Semiconductor Manufacturing (TSM) could choke the world’s economy. Amid all the smoke – here is our simple interpretation of the situation:

  1. This is a “Great Game” between China and US – and any meaningful analysis should have this in context;
  2. China’s eventual goal is reunification, by peaceful means if possible; before that, status quo is the best option;
  3. To ensure status quo, China needs to make a credible military threat that anyone altering the status quo will face war (so that nobody does);
  4. China hopes as status quo persists, the balance of power will eventually and firmly tilt into China’s favour;
  5. US wants to ensure status quo for as long as possible, so that China does not break through the first island chain;
  6. The best way for US to maintain the status quo in Taiwan Strait is to make a credible military and economic threat towards China;
  7. China depends on the global markets for its energy needs, so any economic sanction would have grave consequences to the economy and hence, social stability – the paramount concern of the government;
  8. With credible threats from both China and US, the equilibrium of status quo is maintained.

Now you understand, the aggressive push for clean energy in China does not have the climate change in mind, there are more strategic & security considerations there.

 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.

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